BTC BRIEF: Surplus or Shortfall? Finally Some Breathing Room, But Not Much . . .

OVERVIEW

When state lawmakers arrive in Raleigh for this year’s legislative session, they will be confronted by the state’s first budget surplus since 2000. Unfortunately, they will soon discover that the oasis of surplus revenues is more like a mirage. According to NC Budget & Tax Center calculations, revenues available for fiscal year 2007 will be approximately $695 million more than what is needed to maintain current service levels. However, after removing one-time revenues from the calculations, the precarious nature of the state’s financial position becomes evident. If non-recurring revenues are left out of the calculations, the surplus falls to a mere $63 million.